WRAP: Matjila says Gupta-owned New Age ate Independent Media's advertising lunch

Former Public Investment Corperation (PIC) CEO Dan Matjila gives evidence during the Judicial Commission of Inquiry into the PIC on Monday, 8 July 2019. (Photo by Gallo Images / Phill Magakoe)
Former Public Investment Corperation (PIC) CEO Dan Matjila gives evidence during the Judicial Commission of Inquiry into the PIC on Monday, 8 July 2019. (Photo by Gallo Images / Phill Magakoe)
Last Updated

23 Jul 2019

Matjila repeats that confidential information about how kept being leaker, including to the media. 

He says he never told Menye that he "owns the PIC". 

This is something that Menye said when she testified before the commission previously. 

23 Jul 2019

Matjila testifies that Menye and "some of her team" spent the whole night "rebuilding servers" of the PIC on or about 6 July. 

He says no-one knows what she did to the servers. 

Evidence leader, advocate Advocate Jannie Lubbe, notes that Menye contacted him to say that she advised all users about the power surge that caused the power failure while they were fixing the servers. 

23 Jul 2019

Assistant commissioner Gill Marcus now asks why the PIC's internal audit and risk teams did not go and proactively make their presence felt while the servers were being fixed, if Menye had sent out notification emails. 

Majtila said no-one told them. 

He says they only discovered afterwards that the servers had been rebuilt. 

23 Jul 2019

Matjila says the PIC did not take action against Menye. 

Marcus now asks what steps the PIC took after the servers had been rebuilt. 

"I still have reservations about what was don't there," he says. He said he asked questions but did not get answers to his satisfaction.  

23 Jul 2019

Lubbe now notes that Menye says she understood that the CEO didn't want her there. 

Lubbe notes that no disciplinary hearing started for Menye. She took an R7m settlement. 

After Matjila resigned, the PIC board took a resolution to reappoint Menye. 

23 Jul 2019

Matjila previously said that after she was hired, he came to understand that Menye was not so reliable. 

Marcus now asked him what formal steps he took, given that she was the head of the IT group. 

Matjila says he took no specific steps but scrutinised very carefully what she told him. 

23 Jul 2019

Matjila says that, by the time he left the state-run asset manager in late 2018, staff had undergone courses in how to secure data. 

23 Jul 2019

Matjila is now asked who whistle-blower James Nogu or James Noku is. 

"I wish I knew who James Nogu is," he says. He says he has an idea who it is, but does not name any names. 

He says he hopes the commission of inquiry will be able to uncover who it is. 

He says James Nogu is not, in his view, a bona fide whistle-blower. 

23 Jul 2019

Matjila says whistle-blower James Nogu is not above board.

He says the PIC has an independent service provider that provides a whistle-blowing service that staff can use. 

He says 'James Nogu' has damaged the reputations of people at the PIC. 

23 Jul 2019

The chair of the commission now asks Matjila why it was necessary to check the emails of staff members in an effort to find out who was leaking information. 

"Were people not justified in saying they were spied on?" he asks. 

Matjila says it may have been uncomfortable, but it was not done secretly. He says the process of investigating the leaks had a mandate from the board. 

"That is the process we needed to go through," he said. "It has to be done". 

He said only laptops were gone through, not phones. 

23 Jul 2019

Matjila now moves onto Paul Magula, the former head of risk and compliance at the PIC. Magula was one of two PIC nominee directors at failed banK VBS. 

23 Jul 2019

Matjila says Magula "abandoned his duties" and overloaded deputies with work. 

He says he learned from a "prominent politician" that Magula was "tipped to take over from me once I was fired from the PIC". 

"This I believe was in return for facilitating a housing loan for the former state president". 

He did not provide further information, or say who the "prominent politician" was.

Magula was fired form the PIC in April 2018.  

VBS, Jacob Zuma and the 'sham' Nkandla bond he couldn't afford

23 Jul 2019

Evidence leader Advocate Lubbe says PIC staff were scared to testify before the commission. He says staff were reluctant to come forward. 

23 Jul 2019

Matjila now says most staff at the PIC were appreciative of his leadership style. "They haven't testified at this commission".  

He says as a leader he gave staff "space to perform" and worked to build the skills of colleagues. 

"I have not allowed people to misbehave."

He said a good leader cannot be "nice" all the time - firm but "not autocratic". 

23 Jul 2019

Speaking of the PIC's head of HR Chris Pholwane, Matjila says they worked together closely. 

But he says he was not aware of some of the accusations against Pholwane raised at the commission. 

He says he has not seen reports into Pholwane's conduct. 

He says issues raised against Pholwnae were not rased with him when he was the head of the PIC. 


23 Jul 2019

Marcus now asks Matjial about the establishment of a union within the PIC, and asks Matjila for his view.

"My view is that it is fine. I don't think there is a problem."

He says it was clear staff had lost confidence in the ability of management to deal with their problems. 

He said the biggest driver was the payment of bonuses. 

"It became a problem because they didn't know if bonuses would be paid at some point,"

23 Jul 2019

Marcus asks Matjila whether he can say that the PIC has been "extremely successful", given that a commission of inquiry has had to be established. 

He replied that the main focus of the PIC was to deliver returns. He says the commission is looking at only 2% of the transactions. 

98% of the portfolio is doing very well, he says. 

He says the PIC is dealing with "small wounds". 

23 Jul 2019

Marcus notes the commission is not only looking at figures but is looking at allegations of impropriety. 

She notes there are no findings or evidence yet. 

She calls Matjila's response that 98% of the PIC is performing "extremely well" is "a little dismissive", noting that the roughly R40bn of investments under investigation is real money. 

23 Jul 2019

Speaking about HR practices at the state-run asset manager, Matjila says he established a suggestion box for staff to put complaints in. He says he also gave staff his cell phone number. 

He says he also started breakfast meetings with staff. 

He says some senior managers were not living up to the values of the PIC. He calls employees who reached out to him personally "courageous". 

"The undercurrents pointed to a distressed environment," he notes. 

He says while the PIC had good policies, these were not properly implemented. 

23 Jul 2019

Matjila says he made himself accessible to staff. 

He says at times he was accused of even being "too accessible". 

He says it is a pity that the asset manager's whistle-blowing services were not trusted by employees. 

23 Jul 2019

The commission has adjourned until 14:00. 

23 Jul 2019

After a one hour lunchbreak, the inquiry has resumed. 

The PIC's former head Dan Matjila starts by saying his refusal to approve a R12m teleconferencing centre "must have angered' Vuyokazi Menye, who headed the corporation's IT department.

He says he has been the victim of "mobbing". 

He said that whistle-blower 'James Nogu' started rumours against him, which were then picked and amplified in the media.  

23 Jul 2019

Evidence leader Jannie Lubbe, in response, says he has checked with Menye and she has said she did not ask for the R12m teleconferencing centre. She said the acquisition of the equipment had already been approved when she started at the PIC. 

Matjila, meanwhile, says the finance department should be consulted. 

23 Jul 2019

Lubbe says that evidence given by former PIC employees is that if you don't toe the line you risk being forced out of the state-run asset manager. 

Matjila, in response, says he has tried his best to run the organisation ina proper manner. 

Lubbe says Menye has informed him that he never asked for a R1bn budget to upgrade the PIC's IT infrastructure over 5 years, but R500m. 

Matjila says he understood it to be R1bn. 

23 Jul 2019

An odd noise has now started - it sounds like someone is drilling. 

The inquiry adjourns for 5 minutes to find its source. 

23 Jul 2019

The noise has ceased and the inquiry continues. 

The commission will now consider investigations into the PIC by the public protector. 

23 Jul 2019

Matjila says both former Public Protector Thuli Madonsela and current Public Protector Busisiwe Mkhwebane have investigated the PIC. 

He says the PIC has not received feedback on some of the probes. 

Given that there are outstanding probes, assistant commissioner Emmanuel Lediga asks whether the public protector could help. 

Lubbe, meanwhile, says that the commission has reached out to Mkhwebane for cooperation but without success.  

23 Jul 2019

Matjila says that the public protector has probed, or is in the process of probing, or complaints have been lodged around: 

*S&S refinery 

*The issue of bonuses

*The James Nogu whistle-blower allegations 

*The PIC's SacOil investment

*Complains by UDM leader Bantu Holomisa 


23 Jul 2019

From HR questions, the inquiry now pivots to the Independent Media Group and Sagarmatha transactions. 

23 Jul 2019

Matjila, reading from his prepared statement, starts off by saying that the chairperson of Sekunjalo, Iqbal Survé, approached him in early 2012 to test whether the PIC could fund him to acquire 100% of the business of Independent News Media SA. 

Matjila says he asked Survé to prepare a formal investment memorandum, which he passed on to the private equity team to evaluate. 

"I must stress that once I have handed over a transaction ... I don't get involved in the transaction until the transaction team advises me they are ready to take the transaction to the next stage."

23 Jul 2019

On 26 July 2012, says Matjila, Sekunajlo made an unsolicited offer of R2.2bn to INM, the seller. 

The price was based on the 2011 audited statement, he says. 

He says the seller did not entertain the offer and it expired. 

He says other bidders approached the PIC for financing, including Blueprint Consortium, a Chinese Group, Patrice Motsepe, Robert Gumede, the Gupta family through the New Age, journalists, as well as private equity groups. 

23 Jul 2019

Sekunjalo won the preferred bidder status and started with due diligence, he says. 

It then revised its offer to R2bn. The PIC gave an offer of support, subject to due diligence. 

At the time, he says Sekunjalo was raising capital from other firms. 

The PIC, he said, would have an exposure of R1bn, exclusive of 25% equity. 

23 Jul 2019

Matjila says the PIC's investment committee then presented its proposal to the group's board, which was accepted. 

It was also presented to the Government Employees Pension Fund. 

He says the GEPF were not supportive of the deal, as the asset was in an industry with a "bleak future". 

He says the GEPF said the PIC could continue as long as exposure did not exceed R2bn. 

The PIC board then later approved a maximum exposure of R1.44bn investment. 

This included 

Direct equity of 25% for R167m

A shareholder loan of to INMSA of R773m, redeemable at an internal rate of return of 15% per annum

An equity loan to Sekunjalo of R500m 

Matjila said the balance of the R2bn must be raised from other sources. Sekunjalo then approached the China Africa Development Fund. 

23 Jul 2019

Media reports that the PIC had invested R2bn was false, he says.

He says R397m was repaid to the PIC.  

He says total exposure from the PIC to INMSA was R888.3m. 

Matjila says he later became aware that the Gupta family had an option to buy 27.5% in INMSA from Sekunjalo. 

He says he was concerned by this, as it would boost the Gupta's "propaganda machinery". 

He says he "refused their participation". 

23 Jul 2019

Matjila says PIC's investment in Sekunjalo and INMSA performed "very poorly" in line with other print media companies. 

He notes share prices of Caxton and Tiso Black Star have also declined. 

He says the investment has, however, helped the transformation and contributed to democracy. 

The media group has not been able to meet its obligations to the PIC, he says.

He says Sekunjalo approached the PIC in 2017 with a view to restructuring loans and claims. 

The group proposed to acquire all the shares and loan claims that the PIC has in Sekunjalo, in exchange for shares in a new company to be listed called Sagarmatha. 

Sagarmatha was expected to have a primary listing on the JSE, and a secondary listing on the Hong Kong and NY stock exchanges, he syas. 

23 Jul 2019

He says the PIC's counteroffer was for the conversion of R343m into equity in Sagarmatha, and all loans and claims to be settled. 

This would have made the asset manager a profit, he says. 

Matjila notes that Sagarmatha never, in fact, listed on the JSE. 

The agreement then lapsed. 

Survé compares Sagarmatha to Uber, says it would have been valued at $10 billion

23 Jul 2019

In response to questions, Matjila says that he sent documents to Sekunjalo chairperson Iqbal Survé related to the James Nogu "whistle-blower" emails. 

"The issue of James Nogu was in the news and he [Surve] asked for a copy [of the emails] because his journalist was writing a story about it". 

"He wanted to see the emails because some other journalists had it already," says Matjila. 

Matjila confirms he forwarded email correspondence marked "strictly confidential" to Surve.

He says these were not confidential anymore, because it was in the news that he was being probed by police 


23 Jul 2019

The inquiry is adjourning for a few minutes to get the right documents. 

23 Jul 2019

The inquiry has resumed. 

Matjila now has a copy of the agreement between Sagarmatha and the PIC in front of him. 

23 Jul 2019

Matjila is now asked about a document he signed in late 2017 about a proposed sale agreement with Sagarmatha, and the PIC's proposed subscription of shares in the new company. 

Matjila says he needs more information about the drawing up of the document, says it was prepared by the legal team. 

23 Jul 2019

There is now some confusion about documents that different teams are referring to. 

23 Jul 2019

Matjila says there was lots of "back and forth" between the PIC and Sagarmatha up until the company did not list on the JSE. 

He said there were "several iterations" in negotiations between the PIC and Sekunjalo, about the asset manager exiting its investments in Independent Media and proposed investments in Sagarmatha. 

JSE: Sagarmatha listing was cancelled due to non-compliance

23 Jul 2019

Matjila's counsel interjects to say that Matjila needs more time to look at three different documents the inquiry is considering, some of which were just recently made available to him. 

The chair of the inquiry says the evidence leader Isaac Monnahela should avoid the appearance of cross-examination. 

23 Jul 2019

Evidence leader Isaac Monnahela asks why the PIC invested in Independent Media if the GEPF was unsure about investing in it. 

Matjila notes that the investment met the mandate of PIC investments. 

23 Jul 2019

Gill Marcus asks Matjila about the GEPF's discomfort around the Independent Media Investments, as well as that of the GEPF board. 

She notes the PIC's loan to Sekunjalo has never been serviced. 

"Should you have listened more carefully?" she asks.  

23 Jul 2019

Marcus asks why Matjila did not consider investing in other media houses.

She notes that he knew from the outset that Independent Media may have struggled to service its loans due to a tough operating environment in the media. 

Matjila says that, while it was known that the print media environment was tough, Independent Media put forward a digital strategy that appeared promising. 

23 Jul 2019

Marcus asks what measures the PIC took to make Independent Media service its debt. 

"There was no cash clearly for them to settle the obligations," says Matjila. 

He says the proposed restructuring at Independent Media was part of a proposal to help out the company. 

23 Jul 2019

Marcus notes there were five years of non-service of Independent Media's debt of R888m, yet the PIC chose to work with other entities in the Sekunjalo Group.  

Marcus says there were, in total, four transactions or proposed transactions with companies in the Sekunjalo Group: Premier Fishing, Ayo, Sagarmatha and Independent Media.

23 Jul 2019

Matjila states that many print media groups apart from the Gupta-owned New Age "took a hit" due to government advertising drying up. 

He said the plan to grow Independent Media was to attract more government advertising, as it would be the most transformed media group in SA. 

"All the business was taken away," he said. 

He says he doesn't think there was a problem with management. 

23 Jul 2019

Marcus now aks why the PIC only supported Independent Media, given what Matjila has said about the need to support democracy. 

He says the PIC also has investments in Naspers and Tiso Blackstar. 

With that the inquiry adjourns for the day. 

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